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The CADJPY has played out beautifully since my January 22nd video.
At the time, the risk-sensitive pair was trading at 83.71.
Given the way the pair was starting to roll over within the ascending channel, a break lower seemed likely.
However, CADJPY sellers needed to secure a close below channel support to confirm the breakdown.
The January 24th candle did just that.
And shortly after the January 27th gap down, the CADJPY reached our first target at 81.60 on February 3rd.
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But since reaching 81.60 support, the CADJPY has started to look bullish again.
At least that’s the case for now.
Notice the inverse head and shoulders that formed recently on the 4-hour chart below.
I don’t usually trade or even mention head and shoulders patterns that develop on the intraday time frames.
However, given the structure of this one and the fact that CADJPY recently bounced from 81.60, I felt inclined to share it.
In fact, I already shared this pattern on the Daily Price Action membership site when CADJPY was trading at 82.70.
Furthermore, the measured objective lines up with a familiar level.
If we use the height of this pattern to identify a target from today’s breakout point, we get an area close to the bottom of the 2019 ascending channel.
Remember that pattern?
It’s the same one I pointed out on January 22nd.
At the time of this writing, that objective is somewhere around the 84.00 handle or perhaps just below it.
But first, CADJPY buyers need to get past the 83.00/10 resistance area.
It’s the location of the gap lower that developed at the end of January.
The 83.00 region also served as support for CADJPY in late December and early January.
If bulls can get through 83.00/10, there isn’t much standing in the way of a run at the 84.00 objective, in my opinion.
This idea on the 4-hour time frame is intact as long as CADJPY is above the neckline near 82.60.